Zscaler revenue growth positions stock for potential double value
- Zscaler reported $2.67 billion in revenue for fiscal 2025, a 23% increase from the previous year.
- Analysts expect revenues to rise to $3.3 billion in fiscal 2026, creating an opportunity for stock growth.
- Investors should consider the potential for Zscaler's stock to double in value as the company navigates the competitive cloud security landscape.
In Chongqing, China, on August 26, 2025, Zscaler, Inc., an American cloud security company, reported a revenue of $2.67 billion for fiscal 2025, marking a 23% year-over-year increase. Industry analysts predict that Zscaler's revenue may approach $3.3 billion in fiscal 2026. Despite the positive revenue growth, Zscaler continues to face challenges, such as GAAP losses and high operating expenses that account for nearly 60% of its revenue. Investors are evaluating the stock's potential upside amid market volatility and Zscaler's position within the competitive cloud security industry. Zscaler specializes in zero trust architecture and secure web gateway solutions, positioning itself within a growing demand as businesses transition to cloud and hybrid models. The increasing necessity for Zero Trust and secure access solutions is seen as a significant tailwind for Zscaler's future. Analysts note that the company's stock is trading at a discount compared to other high-growth competitors like CrowdStrike and Cloudflare, reinforcing the notion that Zscaler could see its valuation reset as its revenue grows. Innovations, such as AI-powered security offerings and strategic collaborations with hyperscalers and channel partners, enhance Zscaler's market reach. However, despite advancements in non-GAAP profitability, the persistence of GAAP losses may deter some institutional investors. It highlights Zscaler's challenging current market dynamics, despite its strengths and growth potential. Investors must be prepared for risks as the company aims to execute its ambitious plans amid a competitive environment. Overall, Zscaler represents a high-risk and high-reward opportunity for investors confident in the cloud security market. Should Zscaler achieve the anticipated revenue figures and experience a modest expansion in its price-to-sales ratio, the stock could potentially approach a value of $550 per share, doubling from current levels. Nonetheless, the situation requires careful execution and management to navigate the challenges and achieve these financial ambitions.